The biggest flaw in the net neutrality debate

Even Sunday night HBO watchers are worried the Federal
Communications Commission will soon put an end to net
neutrality.

Earlier this month, on the HBO comedy news show "Last Week
Tonight," host John Oliver went on a 13-minute
rant against the new set of internet rules proposed by the FCC.
He warned that the rules would lead to a world where internet
service providers like Comcast and Verizon can sell special
treatment to web companies like Google and Netflix, charging extra
fees to deliver their online videos and other content at fast
speeds, and he urged viewers to bombard the FCC website with
protests, saying the rules would end up hurting smaller web outfits
that can't afford to pay the fees. The next day, the FCC site
buckled under the traffic and went offline.

It was just part of a sweeping effort to squash the proposed
rules. When the rules first leaked out in May, protesters camped
out in front of the FCC's Washington offices. Big tech companies
such as Google, Amazon, and Netflix signed a letter asking the government communications agency to bar
internet providers from discriminating "both technically and
financially against internet companies." And last week, two big
name Democrats on Capitol Hill unveiled a bill
that seeks to undermine the new rules. Nearly everyone, it
seems, wants to prevent the FCC from allowing some companies to
have internet "fast lanes" while others toil at slower speeds.

"Most of the points of the debate are artificial,
distracting, and based on an incorrect mental model on how the
internet works."

The only trouble is that, here in the year 2014, complaints
about a fast-lane don't make much sense. Today, privileged
companies -- including Google, Facebook, and Netflix -- already
benefit from what are essentially internet fast lanes, and this has
been the case for years. Such web giants -- and others -- now have direct connections to big ISPs
like Comcast and Verizon, and they run dedicated computer servers
deep inside these ISPs. In technical lingo, these are known as
"peering connections" and "content delivery servers," and they're a
vital part of the way the internet works.

"Fast lane is how the internet is built today," says Craig
Labovitz, who, as the CEO of DeepField Networks, an outfit whose
sole mission is to track how companies build internet
infrastructure, probably knows more about the design of the modern
internet than anyone else. And many other internet experts agree
with him. "The net neutrality debate has got many facets to it, and
most of the points of the debate are artificial, distracting, and
based on an incorrect mental model on how the internet works," says
Dave Taht, a developer of open-source
networking software.

The concepts driving today's net neutrality debate caught on
because the internet used to operate differently -- and because
they were easy for consumers to understand. In many respects, these
concepts were vitally important to the evolution of the internet
over the past decades. But in today's world, they don't address the
real issue with the country's ISPs, and if we spend too much time
worried about fast lanes, we could hurt the net's progress rather
than help it.

Even Tim Wu, the man who coined the term neutrality, will tell
you that the fast lane idea isn't what it seems. "The fast lane is
not a literal truth," he says. "But it's a sense that you should
have a fair shot." On the modern internet, as Wu indicates, the
real issue is that such a small number of internet service
providers now control the pipes that reach out to US consumers --
and that number is getting even smaller, with Comcast looking to acquire Time Warner, one of its biggest
rivals. The real issue is that the Comcasts and Verizons are
becoming too big and too powerful. Because every web company has no
choice but to go through these ISPs, the Comcasts and the Verizons
may eventually have too much freedom to decide how much companies
must pay for fast speeds.

We shouldn't waste so much breath on the idea of keeping the
network completely neutral. It isn't neutral now. What we should
really be doing is looking for ways we can increase competition
among ISPs -- ways we can prevent the Comcasts and the AT&Ts
from gaining so much power that they can completely control the
market for internet bandwidth. Sure, we don't want ISPs blocking
certain types of traffic. And we don't want them delivering their
own stuff at 10 gigabits per second and everyone else's stuff at 1
gigabit. But competition is also the best way to stop these types
of extreme behaviour.

Though the network will never be neutral, we can find ways of
promoting a vibrant market for fast internet speeds that's open to
everyone. At the end of his rant, John Oliver actually comes pretty
close to the real issue. Advocates, he says, "should not be talking
about protecting net neutrality. They shouldn't even use that
phrase. They should call it preventing cable company f***ery,
because that is what it is."

The great rewiring
The net neutrality debate is based on a mental model of the
internet that hasn't been accurate for more than a decade. We tend
to think of the internet as a massive public network that everyone
connects to in exactly the same way. We envision data traveling
from Google and Yahoo and Uber and every other online company into
a massive internet backbone, before moving to a vast array of ISPs
that then shuttle it into our homes. That could be a neutral
network, but it's not today's internet. It couldn't be. Too much of
the traffic is now coming from just a handful of companies.

Craig Labowitz made this point last month, when he testified
before a Congressional committee on the proposed Comcast-Time
Warner merger. Ten years ago, internet traffic was "broadly
distributed across thousands of companies," Labovitz said in his
prepared statement to the committee. But by 2009, half of all
internet traffic originated in less than 150 large content and
content-distribution companies, and today, half of the internet's
traffic comes from just 30 outfits, including Google, Facebook, and
Netflix.

Because these companies are moving so much traffic on their own,
they've been forced to make special arrangements with the country's
internet service providers that can facilitate the delivery of
their sites and applications. Basically, they're bypassing the
internet backbone, plugging straight into the ISPs. Today, a
typical webpage request can involve dozens of back-and-forth
communications between the browser and the web server, and even
though internet packets move at the speed of light, all of that
chatter can noticeably slow things down. But by getting inside the
ISPs, the big web companies can significantly cut back on the
delay. Over the last six years, they've essentially rewired the
internet.

Google was the first. As it expanded its online operation to a
network of private data centers across the globe, the web giant
also set up routers inside many of the same data centers used by
big-name ISPs so that traffic could move more directly from
Google's data centers to web surfers. This type of direct
connection is called "peering." Plus, the company set up servers
inside many ISPs so that it could more quickly deliver popular
YouTube videos, webpages, and images. This is called a "content
delivery network," or CDN.

"Transit network providers" such as Level 3 already provide
direct peering connections that anyone can use. And companies such
as Akamai and Cloudflare have long operated CDNs that are available
to anyone. But Google made such arrangements just for its own
stuff, and others are following suit. Netflix and Facebook have
built their own CDNs, and according to reports, Apple is building
one too.

The Google edge
Does this give companies like Google and Netflix a potential
advantage over the next internet startup? Sure it does. But this
isn't necessarily a bad thing. In fact, this rewiring has been
great for consumers. It has allowed millions to enjoy House of
Cards, YouTube, and Kai the hatchet-wielding hitchhiker. It's the
reason why the latest version of high-definition video, Ultra HD
4K, is available for streaming over the internet and not on some
new disk format.

Plus, although Google does have an edge over others, not every
company needs that edge. Most companies don't generate enough
traffic to warrant a dedicated peering connection or CDN. And if
the next internet startup does get big enough, it too can arrange
for a Google-like setup. Building the extra infrastructure is
expensive, but making the right arrangements with a Comcast or a
Verizon is pretty cheap -- at least for now.

Traditionally, ISPs have not charged for interconnection points.
They're happy to have Google or Netflix or Akamai or Level 3
servers or routers in their data centers because they speed up
service for their customers and reduce the amount of traffic that
has to flow out of their network. You could look at these
arrangements as fast lanes -- but because ISPs have treated their
networks as an open marketplace and delivered real value to
consumers and businesses, they're not the kind of thing that the
FCC should be discouraging.

The problem today isn't the fast lanes. The problem is whether
the ISPs will grow so large that they have undue control over the
market for fast speeds -- whether they can independently decide who
gets access to what connection at what price. "The question is
which kinds of fast lanes are problematic and which kinds are not,"
says Marvin Ammori, a lawyer and net neutrality advocate.

Muscle gets flexed
Ammori is worried that, recently, internet service providers --
Comcast, in particular -- have been starting to flex their muscle.
Transit provider Level 3 says that, as it sends traffic into their
networks, the big US ISPs are letting some of its routers overload with data. And amidst these bottlenecks, Comcast is exploring ways of selling its own CDN services that can help
companies increase delivery speeds.

For Ammori and others, this seems like a shake-down that lets
the service providers get paid at at both ends -- by their home
subscribers and by the web companies that deliver stuff to these
subscribers. Ammori worries that the ISPs will start throwing their
weight around unfairly. "We don't want AT&T and others to
impose a tax and to treat those who pay a tax better than others,"
he says. The strange thing is that even some of the biggest "net
neutrality" advocates downplay the importance of these peering
deals, saying they have nothing to do with net neutrality. But this
is largely an argument of semantics. The point is that, whatever
terms you use to describe it, the situation could lead to an unfair
playing field.

"We don't want AT&T and others to impose a tax and
to treat those who pay a tax better than others."

One way to prevent this is through greater competition among
ISPs. If consumers and web companies have many ISPs to choose from,
no one ISP can control who gets what. Ammori doesn't see more
competition among ISPs as a panacea, but he thinks it would help.
And another network activist, Seth Johnson, believes competition
can change things, but that it will take government action to make
that happen. "Competition and regulation are not at odds in every
case. Particularly in telecom," he says. In any event, competition
is a bigger issue than net neutrality. The internet has evolved,
but the debate must evolve along with it.

If Comcast's last-mile of cable connection was available to all
competitors under the same terms that gave dial-up service
providers access to all copper telephone networks back in the
1990s, we would have more ISPs in more geographical areas.
Consumers could simply switch providers whenever Netflix or YouTube
started to get choppy. And that would give Netflix and YouTube more
leverage in their deals with the ISPs. At the moment, this option
-- where ISPs are treated as "common carriers" -- is on the table,
but it seems like a remote possibility. Maybe it shouldn't be.
Instead of railing against fast lanes, we should be pushing
Washington to explore ideas like this that could actually promote
competition among ISPs. "In the present situation," Johnson says,
"the debate is misdirected."